Labour Stats 101 employment: a quick guide

Introduction

This guide provides a brief overview of employment, an introduction to the key concepts and terminology, and lists relevant data sources. This is one in a series of Quick Guides related to labour statistics, designed to provide a basic understanding of Australian labour market data. Other guides include labour force, unemployment and youth unemployment, which are available from the Parliamentary Library website.

In the labour force framework, employed people form part of the currently active population, who along with the unemployed constitute the labour force (see diagram below).

Who are employed people?

The International Labour Organization (ILO) describes employed people as those above a specified age (i.e. 15 years and over) who performed any work at all, in the reference period, for pay or profit (or payment in kind), or who were temporarily absent from work. The type of work may be paid or self-employed. In paid employment, a person will have done some work for wages or salary, in cash or in kind. Self-employment refers to people who did some workfor profit or family gain, in cash or in kind.

For operational purposes, the ILO suggests that ‘some work’ be interpreted as work for at least one hour. While one hour is acknowledged as being insufficient to survive on, it is also argued that all work, no matter how small an amount, contributes to the economy. Using the parameter of ‘one hour or more’ consistently across countries allows employment figures to be compared internationally. The ABS has commented on the use of this definition of employment and suggests that any cut-off point is subject to debate. For example, using 15 hours per week as the definition of employed would exclude people who worked 14.5 hours, but there may be little difference between these two workers and one would be classified as ‘employed’ and the other as ‘unemployed’. The ABS also acknowledges that some people who work low hours choose to do so, while others do not. The topic of underemployment (e.g. workers who would prefer to work more hours) will be covered in a future Quick Guide.

Full-time and part-time workers

By collecting information on people who work ‘one hour or more’, the ABS is able to compile a range of hours-related data, and to disaggregate employed people by full-time and part-time work. The monthly Labour Force release includes original, seasonally adjusted and trend estimates of people employed full-time (35 hours or more) and part-time (1 to 34 hours). The detailed release includes estimates of actual hours worked and usual hours worked and the quarterly release provides actual hours worked by industry and by occupation. The more detailed hours worked data also allows for customised definitions of employment to be calculated.

How is employment measured?

The Australian Bureau of Statistics (ABS) conducts a monthly Labour Force Survey. This household survey is designed to produce key estimates of employment (and unemployment) from a sample of approximately 56,000 people. The survey’s definition of employment closely aligns with international standards and guidelines.

Employed persons are those aged 15 years and over who, during the reference week:

worked for one hour or more for pay, profit, commission or payment in-kind, in a job or business or on a farm, or

worked for one hour or more without pay in a family business or on a farm, or

were employees, employers or own-account workers who were temporarily not at work (see below for more information).

Note that the Labour Force Survey excludes some groups of people, including those living in institutions, members of permanent defence forces, certain diplomatic personnel, and overseas residents. More information is available from the ABS.

Employed persons temporarily away from work

People who had a job, but were not at work during the reference week but met the following criteria, are also counted as employed. The period of absence was: less than four weeks up to the end of the reference week, or more than four weeks up to the end of the reference week but pay was received for some or all of the four week period. The absence was due to: a standard work or shift arrangement, or being on strike or locked out, or being on workers' compensation and expected to return to their job.

People who had a job, business or farm, but were not at work during the reference week are still considered to be employed, as there is an implied attachment to work through their operation of an enterprise (i.e. self-employment).

People who usually work without pay in an economic enterprise owned by a relative, but were absent from work during the reference week are not considered to be employed as they neither received pay nor operated an enterprise.

What are the key measures?

The number of employed people (head count)

Each month the ABS estimates the number of people employed and releases original, seasonally adjusted and trend data. Data is available on employed people by age, sex, social marital status, state or territory of residence, educational attendance, status in employment (e.g. employee, employer), and hours worked.

Graph 1 provides the number of employed people by sex from the start of the data series until the most recent period (seasonally adjusted). Changes in the number of employed people (increases or decreases in the number of ‘workers’) are sometimes mistakenly referred to as gains or losses of jobs. More information is provided on the Parliamentary Library’s Blog, FlagPost, see ‘Employed people or jobs: semantics or an important difference in terminology?’

Employment to population ratio

The ratio is employed people expressed as a proportion of the civilian population in the same age group. The ratio is useful for examining trends in employment over time as it allows for fluctuations in the size of the population. Graph 2 provides the employment to population ratio by sex from the start of the data series until the most recent period (seasonally adjusted).

Employment rate

The rate is the number of employed people expressed as a proportion of a comparable total population. For example, the rate can be used to measure the number of employed people in the working age population
(15 to 64 years). Due to differing methods in calculating the unemployment rate, the employment rate can be used as an alternate method of comparison when describing labour market conditions across countries or within populations. It is often used to assess employment by socio-demographic characteristics, such as gender, age or educational attainment. Graph 3 provides the annual average employment rate of selected age groups in 2013.

Regional data

Regional estimates of employment are released by the ABS in: Labour force, detailed – electronic delivery, Cat. no. 6291.0.55.001 - see Table 16 and Data Cube RM1 (includes age groups), and Labour force, detailed, quarterly, Cat. no. 6291.0.55.003 - see Data Cubes RQ1 and RQ2. These sources provide data for the smallest geographic areas available (excluding the Census). Data is from the original (unadjusted) series and due to the small sample sizes the sampling errors with some estimates may be quite high.

Statistical Areas Level 4 (SA4)

The Statistical Areas Level 4 classification is used to produce labour force estimates for 87 spatial areas across Australia. These areas form part of the new geographic standard through which labour force estimates are now disseminated. These areas replace the formerly used labour force statistical regions.

Census data

The ABS is responsible for collecting and disseminating results from the five-yearly Census of Population and Housing. The Basic Community Profile series provides selected labour force data for small statistical areas (e.g. Commonwealth and State Electoral Divisions) including male and female employment rates, full-time and part-time workers, employment-to-population ratio, occupation and industry of employment. Note: data relating to Commonwealth Electoral Divisions in Victoria and South Australia reflect the boundaries at the time of the 2010 Federal Election. See ABS, Statistical Geography Fact Sheet, Commonwealth and State Electoral Divisions, for more information.

Other data sources

The Statistics and Mapping Section of the Parliamentary Library provide regular updates on employed persons based on ABS data in the Monthly Statistical Bulletin, see ‘1.1 Employment’.